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Solve the profitability of the chester company account

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Reference no: EM132956154

Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:

Order processing cost per order $7

Additional costs if order must be expedited (rushed) $9.00

Customer technical support calls (per call) $12

Relationship management costs (per customer per year) $1200

In addition to these costs, product costs amount to 75% of Sales.

In the prior year, Wizard had the following experience with one of its customers, Chester Company:

Sales $16,000

Number of orders 160

Percent of orders marked rush 70%

Calls to technical support 80

Required:

Problem 1: Calculate the profitability of the Chester Company account.

Reference no: EM132956154

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